Both sides of government have made promises about their plans of attack with superannuation should they be elected to govern in May, but the changes in the pipeline are unsettling for taxpayers and business owners alike.
Both sides of government have committed to a more stable, predictable superannuation environment — but history and the pipeline of future changes tell a different story.
Continued tinkering and uncertainty alongside promises for stability are off-putting for taxpayers and SMEs alike, and detract from their confidence in using superannuation as a vehicle for retirement income.
For example, the cloudiness over the future of loans in superannuation, which many businesses use to purchase the commercial property they run their operations out of, is proving to be a concern for SMEs.
Policy wrap: The Liberal Party
The Morrison government has issued a guarantee that the party will not implement new taxes on superannuation.
However, when Scott Morrison was federal treasurer in 2016, he introduced the biggest round of changes to superannuation since 2007, when John Howard was prime minister and Peter Costello was treasurer.
This included the $1.6 million transfer balance cap, which superannuation experts and taxpayers alike are still grappling with at an administrative level.
Mr Morrison also moved to introduce a lifetime cap on contributions of $500,000 for non-concessional contributions, which didn’t eventuate.
The Labor Party
Opposition Leader Bill Shorten and shadow treasurer Chris Bowen said that there’s nothing new in the pipeline from their party.
However, there are a few proposed measures which have already been announced for superannuation.
These include the contentious plans to scrap cash refunds on dividend imputation credits. While this is not strictly superannuation policy, it takes aim at SMSFs using the franking credits system. SMSFs with at least one pensioner prior to 28 March 2018 will be exempt from the changes.
The measures also include changes to the division 293 tax threshold, at which high-income earners pay an additional 15 per cent tax on concessional contributions, which would be lowered from $250,000 to $200,000 under Labor.
Labor is also proposing lowering the non-concessional contribution caps and removing the provision for catch-up contributions.
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